[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 330 Introduced in Senate (IS)]
111th CONGRESS
1st Session
S. 330
To amend title XVIII of the Social Security Act to deliver a meaningful
benefit and lower prescription drug prices under the Medicare Program.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
January 27, 2009
Mr. Durbin (for himself, Mr. Whitehouse, Mr. Akaka, Mr. Brown, and Mr.
Sanders) introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend title XVIII of the Social Security Act to deliver a meaningful
benefit and lower prescription drug prices under the Medicare Program.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Medicare Prescription Drug Savings
and Choice Act of 2009''.
SEC. 2. ESTABLISHMENT OF MEDICARE OPERATED PRESCRIPTION DRUG PLAN
OPTION.
(a) In General.--Subpart 2 of part D of the Social Security Act is
amended by inserting after section 1860D-11 (42 U.S.C. 1395w-111) the
following new section:
``medicare operated prescription drug plan option
``Sec. 1860D-11A. (a) In General.--Notwithstanding any other
provision of this part, for each year (beginning with 2010), in
addition to any plans offered under section 1860D-11, the Secretary
shall offer one or more medicare operated prescription drug plans (as
defined in subsection (c)) with a service area that consists of the
entire United States and shall enter into negotiations in accordance
with subsection (b) with pharmaceutical manufacturers to reduce the
purchase cost of covered part D drugs for eligible part D individuals
who enroll in such a plan.
``(b) Negotiations.--Notwithstanding section 1860D-11(i), for
purposes of offering a medicare operated prescription drug plan under
this section, the Secretary shall negotiate with pharmaceutical
manufacturers with respect to the purchase price of covered part D
drugs in a Medicare operated prescription drug plan and shall encourage
the use of more affordable therapeutic equivalents to the extent such
practices do not override medical necessity as determined by the
prescribing physician. To the extent practicable and consistent with
the previous sentence, the Secretary shall implement strategies similar
to those used by other Federal purchasers of prescription drugs, and
other strategies, including the use of a formulary and formulary
incentives in subsection (e), to reduce the purchase cost of covered
part D drugs.
``(c) Medicare Operated Prescription Drug Plan Defined.--For
purposes of this part, the term `medicare operated prescription drug
plan' means a prescription drug plan that offers qualified prescription
drug coverage and access to negotiated prices described in section
1860D-2(a)(1)(A). Such a plan may offer supplemental prescription drug
coverage in the same manner as other qualified prescription drug
coverage offered by other prescription drug plans.
``(d) Monthly Beneficiary Premium.--
``(1) Qualified prescription drug coverage.--The monthly
beneficiary premium for qualified prescription drug coverage
and access to negotiated prices described in section 1860D-
2(a)(1)(A) to be charged under a medicare operated prescription
drug plan shall be uniform nationally. Such premium for months
in 2010 and each succeeding year shall be based on the average
monthly per capita actuarial cost of offering the medicare
operated prescription drug plan for the year involved,
including administrative expenses.
``(2) Supplemental prescription drug coverage.--Insofar as
a medicare operated prescription drug plan offers supplemental
prescription drug coverage, the Secretary may adjust the amount
of the premium charged under paragraph (1).
``(e) Use of a Formulary and Formulary Incentives.--
``(1) In general.--With respect to the operation of a
medicare operated prescription drug plan, the Secretary shall
establish and apply a formulary (and may include formulary
incentives described in paragraph (2)(C)(ii)) in accordance
with this subsection in order to--
``(A) increase patient safety;
``(B) increase appropriate use and reduce
inappropriate use of drugs; and
``(C) reward value.
``(2) Development of initial formulary.--
``(A) In general.--In selecting covered part D
drugs for inclusion in a formulary. the Secretary shall
consider clinical benefit and price.
``(B) Role of ahrq.--The Director of the Agency for
Healthcare Research and Quality shall be responsible
for assessing the clinical benefit of covered part D
drugs and making recommendations to the Secretary
regarding which drugs should be included in the
formulary. In conducting such assessments and making
such recommendations, the Director shall--
``(i) consider safety concerns including
those identified by the Federal Food and Drug
Administration;
``(ii) use available data and evaluations,
with priority given to randomized controlled
trials, to examine clinical effectiveness,
comparative effectiveness, safety, and enhanced
compliance with a drug regimen;
``(iii) use the same classes of drugs
developed by United States Pharmacopeia for
this part;
``(iv) consider evaluations made by--
``(I) the Director under section
1013 of Medicare Prescription Drug,
Improvement, and Modernization Act of
2003;
``(II) other Federal entities, such
as the Secretary of Veterans Affairs;
and
``(III) other private and public
entities, such as the Drug
Effectiveness Review Project and
Medicaid programs; and
``(v) recommend to the Secretary--
``(I) those drugs in a class that
provide a greater clinical benefit,
including fewer safety concerns or less
risk of side-effects, than another drug
in the same class that should be
included in the formulary;
``(II) those drugs in a class that
provide less clinical benefit,
including greater safety concerns or a
greater risk of side-effects, than
another drug in the same class that
should be excluded from the formulary;
and
``(III) drugs in a class with same
or similar clinical benefit for which
it would be appropriate for the
Secretary to competitively bid (or
negotiate) for placement on the
formulary.
``(C) Consideration of ahrq recommendations.--
``(i) In general.--The Secretary, after
taking into consideration the recommendations
under subparagraph (B)(v), shall establish a
formulary, and formulary incentives, to
encourage use of covered part D drugs that--
``(I) have a lower cost and provide
a greater clinical benefit than other
drugs;
``(II) have a lower cost than other
drugs with same or similar clinical
benefit; and
``(III) drugs that have the same
cost but provide greater clinical
benefit than other drugs.
``(ii) Formulary incentives.--The formulary
incentives under clause (i) may be in the form
of one or more of the following:
``(I) Tiered copayments.
``(II) Reference pricing.
``(III) Prior authorization.
``(IV) Step therapy.
``(V) Medication therapy
management.
``(VI) Generic drug substitution.
``(iii) Flexibility.--In applying such
formulary incentives the Secretary may decide
not to impose any cost-sharing for a covered
part D drug for which--
``(I) the elimination of cost
sharing would be expected to increase
compliance with a drug regimen; and
``(II) compliance would be expected
to produce savings under part A or B or
both.
``(3) Limitations on formulary.--In any formulary
established under this subsection, the formulary may not be
changed during a year, except--
``(A) to add a generic version of a covered part D
drug that entered the market;
``(B) to remove such a drug for which a safety
problem is found; and
``(C) to add a drug that the Secretary identifies
as a drug which treats a condition for which there has
not previously been a treatment option or for which a
clear and significant benefit has been demonstrated
over other covered part D drugs.
``(4) Adding drugs to the initial formulary.--
``(A) Use of advisory committee.--The Secretary
shall establish and appoint an advisory committee (in
this paragraph referred to as the `advisory
committee')--
``(i) to review petitions from drug
manufacturers, health care provider
organizations, patient groups, and other
entities for inclusion of a drug in, or other
changes to, such formulary; and
``(ii) to recommend any changes to the
formulary established under this subsection.
``(B) Composition.--The advisory committee shall be
composed of 9 members and shall include representatives
of physicians, pharmacists, and consumers and others
with expertise in evaluating prescription drugs. The
Secretary shall select members based on their knowledge
of pharmaceuticals and the Medicare population. Members
shall be deemed to be special Government employees for
purposes of applying the conflict of interest
provisions under section 208 of title 18, United States
Code, and no waiver of such provisions for such a
member shall be permitted.
``(C) Consultation.--The advisory committee shall
consult, as necessary, with physicians who are
specialists in treating the disease for which a drug is
being considered.
``(D) Request for studies.--The advisory committee
may request the Agency for Healthcare Research and
Quality or an academic or research institution to study
and make a report on a petition described in
subparagraph (A)(ii) in order to assess--
``(i) clinical effectiveness;
``(ii) comparative effectiveness;
``(iii) safety; and
``(iv) enhanced compliance with a drug
regimen.
``(E) Recommendations.--The advisory committee
shall make recommendations to the Secretary regarding--
``(i) whether a covered part D drug is
found to provide a greater clinical benefit,
including fewer safety concerns or less risk of
side-effects, than another drug in the same
class that is currently included in the
formulary and should be included in the
formulary;
``(ii) whether a covered part D drug is
found to provide less clinical benefit,
including greater safety concerns or a greater
risk of side-effects, than another drug in the
same class that is currently included in the
formulary and should not be included in the
formulary; and
``(iii) whether a covered part D drug has
the same or similar clinical benefit to a drug
in the same class that is currently included in
the formulary and whether the drug should be
included in the formulary.
``(F) Limitations on review of manufacturer
petitions.--The advisory committee shall not review a
petition of a drug manufacturer under subparagraph
(A)(ii) with respect to a covered part D drug unless
the petition is accompanied by the following:
``(i) Raw data from clinical trials on the
safety and effectiveness of the drug.
``(ii) Any data from clinical trials
conducted using active controls on the drug or
drugs that are the current standard of care.
``(iii) Any available data on comparative
effectiveness of the drug.
``(iv) Any other information the Secretary
requires for the advisory committee to complete
its review.
``(G) Response to recommendations.--The Secretary
shall review the recommendations of the advisory
committee and if the Secretary accepts such
recommendations the Secretary shall modify the
formulary established under this subsection
accordingly. Nothing in this section shall preclude the
Secretary from adding to the formulary a drug for which
the Director of the Agency for Healthcare Research and
Quality or the advisory committee has not made a
recommendation.
``(H) Notice of changes.--The Secretary shall
provide timely notice to beneficiaries and health
professionals about changes to the formulary or
formulary incentives.
``(f) Informing Beneficiaries.--The Secretary shall take steps to
inform beneficiaries about the availability of a Medicare operated drug
plan or plans including providing information in the annual handbook
distributed to all beneficiaries and adding information to the official
public Medicare website related to prescription drug coverage available
through this part.
``(g) Application of All Other Requirements for Prescription Drug
Plans.--Except as specifically provided in this section, any Medicare
operated drug plan shall meet the same requirements as apply to any
other prescription drug plan, including the requirements of section
1860D-4(b)(1) relating to assuring pharmacy access.''.
(b) Conforming Amendments.--
(1) Section 1860D-3(a) of the Social Security Act (42
U.S.C. 1395w-103(a)) is amended by adding at the end the
following new paragraph:
``(4) Availability of the medicare operated prescription
drug plan.--A medicare operated prescription drug plan (as
defined in section 1860D-11A(c)) shall be offered nationally in
accordance with section 1860D-11A.''.
(2)(A) Section 1860D-3 of the Social Security Act (42
U.S.C. 1395w-103) is amended by adding at the end the following
new subsection:
``(c) Provisions Only Applicable in 2006, 2007, 2008, and 2009.--
The provisions of this section shall only apply with respect to 2006,
2007, 2008, and 2009.''.
(B) Section 1860D-11(g) of such Act (42 U.S.C. 1395w-
111(g)) is amended by adding at the end the following new
paragraph:
``(8) No authority for fallback plans after 2009.--A
fallback prescription drug plan shall not be available after
December 31, 2009.''.
(3) Section 1860D-13(c)(3) of such Act (42 U.S.C. 1395w-
113(c)(3)) is amended--
(A) in the heading, by inserting ``and medicare
operated prescription drug plans'' after ``Fallback
plans''; and
(B) by inserting ``or a medicare operated
prescription drug plan'' after ``a fallback
prescription drug plan''.
(4) Section 1860D-16(b)(1) of such Act (42 U.S.C.1395w-
116(b)(1)) is amended--
(A) in subparagraph (C), by striking ``and'' after
the semicolon at the end;
(B) in subparagraph (D), by striking the period at
the end and inserting ``; and''; and
(C) by adding at the end the following new
subparagraph:
``(E) payments for expenses incurred with respect
to the operation of medicare operated prescription drug
plans under section 1860D-11A.''.
(5) Section 1860D-41(a) of such Act (42 U.S.C. 1395w-
151(a)) is amended by adding at the end the following new
paragraph:
``(19) Medicare operated prescription drug plan.--The term
`medicare operated prescription drug plan' has the meaning
given such term in section 1860D-11A(c).''.
(c) Effective Date.--The amendments made by this section shall take
effect as if included in the enactment of section 101 of the Medicare
Prescription Drug, Improvement, and Modernization Act of 2003.
SEC. 3. IMPROVED APPEALS PROCESS UNDER THE MEDICARE OPERATED
PRESCRIPTION DRUG PLAN.
Section 1860D-4(h) of the Social Security Act (42 U.S.C. 1305w-
104(h)) is amended by adding at the end the following new paragraph:
``(4) Appeals process for medicare operated prescription
drug plan.--
``(A) In general.--The Secretary shall develop a
well-defined process for appeals for denials of
benefits under this part under the medicare operated
prescription drug plan. Such process shall be
efficient, impose minimal administrative burdens, and
ensure the timely procurement of non-formulary drugs or
exemption from formulary incentives when medically
necessary. Medical necessity shall be based on
professional medical judgment, the medical condition of
the beneficiary, and other medical evidence. Such
appeals process shall include--
``(i) an initial review and determination
made by the Secretary; and
``(ii) for appeals denied during the
initial review and determination, the option of
an external review and determination by an
independent entity selected by the Secretary.
``(B) Consultation in development of process.--In
developing the appeals process under subparagraph (A),
the Secretary shall consult with consumer and patient
groups, as well as other key stakeholders to ensure the
goals described in subparagraph (A) are achieved.''.
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